LONDON (Alliance News) - Plastic packaging maker RPC Group PLC hiked its dividend on Thursday, after acquisitions lifted profit and revenue in its recent financial year, and it said the cost synergies from those purchases will be higher than previously guided.
The FTSE 250-listed firm said pretax profit for the year that ended March 31 was GBP75.6 million, up from GBP67.1 million a year earlier, as revenue grew 34% to GBP1.64 billion from GBP1.22 billion.
RPC will pay a final dividend of 12.3 pence, taking its total payout to 17.1p, up 20% from the 14.3p paid a year earlier.
Like-for-like sales grew 3.0% in the year, meaning the majority of the growth came from acquisitions RPC has made. These included Icelandic rigid plastic packaging and components company Promens, which it acquired for EUR386.0 million in late 2014, and a small contribution from Global Closure Systems, the French plastic closures and dispensing systems specialist bought in December for EUR650.0 million. The GCS deal closed in late March.
RPC said the integration of GCS remains on track and said it now expects annual cost synergies from the GCS and Promens acquisitions to hit EUR80.0 million, a EUR15.0 million upgrade on its previous expectations.
Packaging sales grew 4.0% on a like-for-like basis in the year, driven by good growth in personal care and food markets both from new product launches and geographical expansion. During the year, RPC launched airless dispensing systems and its first in-mould labelled thermoforming line for the spreads market.
Margins for the packaging business remained steady in the year, despite acquisition costs and higher polymer in-put prices, as well as the cost of manufacturing optimisation projects launched with a view to squeezing synergies from the Promens deal.
Within RPC's non-packaging business, the Ace mould design and manufacturing unit had a solid year but took a hit from the slowdown in China, where it operates six sites, and a downturn in demand from two key customers. RPC Promens Saeplast, which comprises the materials handling rotational moulding business of Promens and which serves the fishing and agriculture industry, performed well, with sales and profit ahead year-on-year, RPC said.
RPC Promens Vehicles, which makes plastic parts for trucks and specialty vehicles, also performed well, with sales and profit higher and additional long-term orders boosting the order book.
"This has been another successful year with a strong business performance founded upon good underlying organic growth," said Chief Executive Pim Vervaat.
"Going forward, the group continues to explore opportunities for growth in line with the Vision 2020 strategy. The new financial year has started well and in line with management's expectations," he added.
RPC shares were up 0.2% to 804.00p Thursday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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